CRTC issues mandatory order against Vidéotron over inside wiring maneuvering

The CRTC has once again come out against Quebecor Media Inc., issuing a mandatory order against the Quebec media giant’s cable subsidiary Vidéotron ltée on the use of inside wiring – Broadcasting Decision 2002-299. Also this week, the commission rejected a Quebecor Media complaint against Bell ExpressVu LP in ruling that its parent, BCE Inc., wasn’t inappropriately cross-subsidizing the direct-to-home (DTH) satellite TV distributor’s entry into the Quebec market – Telecom Decision 2002-61. The issuance of a mandatory order aimed at ensuring that Vidéotron’s wires are available to third-party competitors comes as no surprise. The public hearing into the matter was a confrontational affair between the CRTC and the Quebecor team, including president/CEO Pierre Karl Péladeau. At the April hearing, Quebecor argued that its subsidiary that took over ownership of the inside wiring in multi-unit dwellings (MUDs) in Quebec from Vidéotron, Câblage QMI Inc. (CQMI), was not subject to CRTC rules (CCR, May 9/02). The CRTC ruled otherwise and on October 9 issued a mandatory order that states that Vidéotron and its subsidiaries, including CQMI, cannot use the inside wiring unless it leases the wiring to Look Communications Inc., Cable VDN Inc., Bell ExpressVu, Star Choice Communications Inc. and any other competitor for 52 cents per subscriber per month. That is the national rate that the CRTC set last month for the use of inside wiring to ensure end user choice (CCR Update, Sept. 4/02). The mandatory order also stipulates that Vidéotron and its subsidiaries and/or affiliates cannot charge "any other fee of any sort over and above the monthly fee;" and that it make available its distribution panel, which is necessary to hook up new customers, to competitors within 24 hours of receiving a request, and must provide a two-hour appointment window. The terms of the mandatory order are to remain "in effect until such time as the commission varies or rescinds them." If Quebecor adheres to the order, it means that Vidéotron competitors can once again begin soliciting and signing up customers in the MUD market in Quebec. Efforts to acquire more customers ceased when CQMI issued notices to distributors stating that it would begin charging $5 per subscriber per month for the use of the wires and a $35 hook up fee for new subscribers (CCR, March 28/02). The commission found that Vidéotron had retained control of the inside wire assets, even though they "may be ostensibly owned by CQMI, which is acting as Vidéotron’s alter ego." The CRTC also determined that Vidéotron and CQMI had breached sections 9 and 10 of the Broadcasting Distribution Regulations, which prohibit "undue preference" and spell out inside wiring obligations. The mandatory order was issued to prevent the continuance of the conduct that the commission found to be in breach of the regulations. In a separate decision issued October 8, the CRTC rejected a Quebecor complaint filed April 4, 2002 claiming that BCE was anti-competitively cross-subsidizing Bell ExpressVu’s entry into the Quebec market through profits earned at Bell Canada. In the decision, the commission states that it remains of the view that the existing mechanisms are appropriate to prevent inappropriate cross-subsidization of Bell ExpressVu by Bell Canada. This week’s decisions are the latest blows by the regulator against Quebecor. Just over a month ago, the CRTC ordered Vidéotron to reimburse Bell Globemedia/NetStar after it cut by 62 per cent the affiliation fees it paid for Le Réseau des sports (RDS). At the same time, it dismissed a complaint filed by Vidéotron against RDS (CCR Update, Sept. 4/02). Rather than heeding the CRTC directives, however, Quebecor appears poised to tie up the courts further on these matters. It has already told the commission that it won’t comply with the regulator’s reimbursement request because of court action on the matter (CCR, Sept. 26/02). Quebecor has also indicated a willingness to take the cross-subsidization issue to court.

CRTC issues mandatory order against Vidéotron over inside wiring maneuvering

Broadcast | October 10, 2002

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